DCSIMG

Market watch: GSK expected to show full-year fall

  • by DOMINIC JEFF
 

LUCOZADE and Ribena owner GlaxoSmithKline is expected to sweeten weak full-year results on Wednesday with news that emerging markets helped it return to sales growth in the final quarter.

At its last update in October the drugs giant called on European governments to halt aggressive price cuts on medicines or suffer “unintended consequences” by limiting the development of new drugs.

Experts predict full-year sales will come in 3.5 per cent lower compared with the previous year at £26.4 billion and are pencilling in an 11 per cent slump in profits to £7.6bn. Analysts at UBS predict sales declines will ease in the final quarter of 2012, down slightly compared to the previous year but up quarter-on-quarter.

Investors in TUI Travel will be hoping that memories of recent wash-out summers remained strong when the Thomson and First Choice parent updates them on Thursday. Holidaymakers looking to escape to the sun have already inspired a 12 per cent surge in bookings for next summer amid a package holiday revival.

Alex Brignall, analyst at UBS, said the group’s recent performance had been strong, helped by improved cost control in the UK and a better mixture of products.

He said: “Booking trends have also accelerated in recent months, and the cautious approach of management was encouraging, given missed expectations in previous years.”

He added that 2013 should see a significant fall in restructuring costs. Online grocer Ocado is poised to reveal another multi-million-pound loss this week after battling to compete with the major supermarkets last year.

The City expects the group to book a loss of between £2 million and £3m after being hit with the cost of its second delivery centre, in Dordon, Warwickshire, while sales were dented by the Olympics and Diamond Jubilee in its third quarter.

But things have been looking up for the group since its banks extended its loan facilities in November and it landed retail veteran Sir Stuart Rose as chairman.

Week ahead:

Tomorrow: Randgold Resources.

Tuesday: ARM Hordings, BG Group, BP.

Wednesday: GlaxoSmithKline, Wolfson Microelectronics.

Thursday: TUI Travel.

Friday: Catlin Group.

 

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